In this interview with CalvinAyre.com’s Stephanie Tower, Alderney eGambling CEO Susan O’Leary discusses the challenges of regulating cryptocurrency use in the gambling industry.
Since their introduction a decade ago, cryptocurrencies like Bitcoin have become the go-to alternative payment solution for a growing number of gambling operators. The appeal of cryptocurrency lies in its security and its ability to protect operators from player fraud. Cryptocurrencies also meet the needs of both operators and players for a self-regulating system protected from outside interference, thanks to blockchain.
Most of all, cryptocurrencies provide instant processing of requests for account replenishment and withdrawal of funds.
Despite its growing popularity, financial and gambling regulators are still divided over the use of digital currencies in day to day transactions. Susan O’Leary, CEO of Alderney eGambling, pointed out that the dark web issues attached to cryptocurrencies remain an obstacle for many regulators. These issues include criminal activities such as money laundering and financial scams.
“Our objective is to prevent harm and I think that is a red line, not just for regulators but for regulated businesses and operations looking for prevention of crime and criminality,” O’Leary told CalvinAyre.com. “From a regulatory point of view, [cryptocurrencies have] no underlying regulatory system. There’s a lot of dark web issues and that’s the main obstacle that we are finding.”
Looking at the bright side, O’Leary said financial and gambling regulators are slowly taking a second look at cryptocurrencies’ potential as an alternative payment solution.
She cited financial regulators in Japan and several African countries that are now either considering regulating cryptocurrencies or finding a way for governments to support it. Gambling regulators, on the other hand, are trying to find better ways to work with cryptocurrencies.
“From the gaming regulatory perspective, [cryptocurrency and blockchain] are both distinct. Yes, their underlying technology is similar, but blockchain use is much simpler. It is more just another data management system that is really effective in lots of different ways. It eases a lot regulatory burden and has lots of potential,” O’Leary said. “And then secondly, the use of cryptocurrency has huge potential and could really have lots of positive beneficial ways.”